Chicago Tribune special report on peak oil

July 31, 2006 5:22 AM

The Chicago Tribune special report on peak oil. Includes a documentary and reporting by Pulitzer-Prize winner Paul Salopek.
posted by stbalbach (78 comments total)

"People like to think technology will always rescue them," said Rep. Roscoe Bartlett (R-Md.), a senior member of the House Science Committee. "But if it still ends up taking two barrels [worth of oil energy] to pump a barrel out of ground, you're in a losing game."

Good point.
posted by Blazecock Pileon at 5:32 AM on July 31, 2006

1973 oil crisis REDUX? Same symphonic conductors in the 'Black Tea Orchestra', playing in different keys?
posted by Unregistered User at 5:38 AM on July 31, 2006

"We know how important this issue is," said Laura Binning, 37, a regular customer at the South Elgin Marathon. "But it's so big. It's hard to get your head around it ... Binning pulled her black H2 Hummer into the station one Saturday afternoon when Qua Iboe crude from Nigeria made up about 26 percent of her $72 gas purchase.

Um. It's so big. Like, um, as big as a f*&#ing Hummer big?

Clueless. Sigh.
posted by scblackman at 5:40 AM on July 31, 2006

Lots of clueless people are quoted...it'd be nice for once to have someone who knows that there exists a swirling world outside their head be interviewed for once.
posted by evilelvis at 6:06 AM on July 31, 2006

Laura Binning, 37. She's probably too young to remember 1972's gas lines and the Hostage Crisis.

That's probably also why she can't be bothered to pull her head ou of her ass...
posted by vhsiv at 6:11 AM on July 31, 2006

She rubbed the heel of one hand tiredly into her eye sockets. With the other, clutching the pump nozzle, she touched a faraway sea.

Great subject but man that is some bad writing.
posted by octothorpe at 6:25 AM on July 31, 2006

With the other, clutching the pump nozzle, she touched a faraway sea.

That's some of that there sexual symbolism if you ask me.

But it's so big. It's hard to get your head around it...

Never mind.

But I'm hoping that peak oil predictions are true and that the price of gasoline keeps going up. That's something she can get her head around. Maybe 50 cents a month, until people like her trade the H2 for a small city car or no car, combine trips, use bikes, walk, take the bus/tram/train. You know, act rationally. And then the price has to stay there, so people think about gas prices when they decide where to live and where to work. Bring the price back down and people will be dumb again.
posted by pracowity at 6:51 AM on July 31, 2006

The factual content was very interesting, and it obviously took a lot of work to assemble, but even Pulitzer prize winners need editors.

I imagine Salopek bored on a nightshift at the station, thinking of all these daft verbal curlicues, and nobody having the face afterwards to tell him what Octothorpe just said.
posted by apodo at 6:59 AM on July 31, 2006

pracowity - as the driver of a prius with a (relatively) short commute, I pray fervently that the opposite of what you say happens. It's not just commuter & soccer moms that depend on oil; the product gets everything we consume to us. Without affordable oil, there's no affordable food. Now, that's not a problem to me, because I'm fucking rich. But my poor neighbors, the ones who can't even afford cars, let alone H2s? What have those poor non-car owning, public transit taking people done to suffer your wrath so flatly? BTW, I use the word "neighbors" loosely. I don't live near anyone who takes mass transit.
posted by jonson at 6:59 AM on July 31, 2006 [1 favorite has favorites]

Let alone, on preview, what pracowity said.
posted by apodo at 7:00 AM on July 31, 2006

jonson - you will live close to them soon enough if they start to not be able to afford food... :)
posted by anthill at 7:01 AM on July 31, 2006

Laura Binning, 37. She's probably too young to remember 1972's gas lines and the Hostage Crisis.

She was an infant for the former and about 10 for the latter.

OTOH, In second grade, knew all about the siege at Khe Sanh because a neighbor across the street came home from it, sadly fractional.

Stuff either touches you as a kid or it doesn't.
posted by pax digita at 7:02 AM on July 31, 2006

The difference between 72 and now is then was a supply-line problem ("downstream"), while peak oil is an "upstream" problem, much more serious, but probably not a sudden lack of supply like in 72 where you have to wait in line (although political instability could cause it periodically).
posted by stbalbach at 7:26 AM on July 31, 2006

Great article, I agree with Octothorpe. The research and story is great, the writing is way too flowery.
posted by justkevin at 7:30 AM on July 31, 2006

Stuff either touches you as a kid or it doesn't.

Amen. I'm 39, and I remember both vividly. I remember by parents getting rid of our hugh Ford LTD woody wagon, and buying a tiny red 1973 Toyota Corolla for the five of us to pile into. I remember the odd and even license plate days for getting gas, and the hour long waits in lines (around the block) once you got there. I remember bracing for having things be like that forever, but oddly, it never happened.

I wonder if some people took that as a sign that it was a temporary thing, rather than a vision of the future.
posted by psmealey at 7:42 AM on July 31, 2006

Maybe 50 cents a month, until people like her trade the H2 for a small city car or no car, combine trips, use bikes, walk, take the bus/tram/train.

Yeah, because everybody lives in the city. Fuck you.
posted by weretable and the undead chairs at 7:50 AM on July 31, 2006

I'm 39, and I remember both vividly. I remember by parents getting rid of our hugh Ford LTD woody wagon

I'm also 39 and remember pushing my parents wood-paneled yellow station wagon while waiting in line.
posted by stbalbach at 7:52 AM on July 31, 2006

But I'm hoping that peak oil predictions are true and that the price of gasoline keeps going up. That's something she can get her head around. Maybe 50 cents a month, until people like her trade the H2 for a small city car or no car, combine trips, use bikes, walk, take the bus/tram/train.

You might want to remember that oil is not only used for energy, it produces a lot of chemicals that get used as machine lubricants as well as key ingredients in plastic. I believe something like 25-40% of oil is used for non-fuel/energy purposes.

Example - as the price of oil goes up, the price of plastic increases, because oil is the source of many of the raw materials that end up in plastic. You can say this is a good thing because people will stop consuming so much plastic, but what is really means is people will instead substitute the inferior good, i.e. consume more paper goods (i.e. paper cups vs plastic cups, boxes, etc) which means killing more trees.

The fact that the prices of plastic goods hasn't increased all that much worries me to the extent it means that producers have been internalizing costs, i.e. reducing profit margins. At some point they can't internalize the price increase anymore and that will be passed to the consumer in the form of a quick price increase or spike.

I've started to notice this with trash bags. (33 bags/pkg is now 28, but the price is the same) Yes, I'm a nerd at the grocery store.
posted by Pastabagel at 7:59 AM on July 31, 2006 [1 favorite has favorites]

Living in Calgary I'm totally shocked by the totally excessive lifestyle still being lived here, what with people in their Hummer H3s thinking they compromised and bought an environmentally friendly vehicle, instead of the regular old military grade one that coulc take a grenade.

The two big things that alarm me:

1. People assume there will always be a source of energy.
2. Few people realise that, for all practical purposes, oil = food.

It won't just be a matter of hopping on the bike. When people can't afford to eat it's gonna be a scene, man.
posted by jimmythefish at 8:03 AM on July 31, 2006

The implications of peak oil are simply staggering. This is going to be THE issue of the next century, as first we scramble to maintain our lifestyle and then maintain our civilization in the face of diminishing energy supplies. We lost 25 years when Reagan was elected and dismantled the solar panels on top of the White House and encouraged Americans to spend as much money as possible. As if we don't have enough to worry about already.. I'd encourage everyone to read "The Party's Over" by Richard Heinberg.
posted by mert at 8:05 AM on July 31, 2006

I was going to post this, one of the best written articles I have read from a major news paper in a while.
posted by sourbrew at 8:10 AM on July 31, 2006

Oh geeze, there's plenty of carbon reserves that can be converted to gasoline. We should focus on reducing pollution instead of moving to a new energy source. Carbon will be the cheapest and easiest to obtain energy source in the forseeable future. Let's focus on making the extraction and use of the energy as clean as possible instead of devolving into end-of-the-world oil shortage scenerios which just end up driving up the price of gas.
posted by geoff. at 8:11 AM on July 31, 2006

You can say this is a good thing because people will stop consuming so much plastic, but what is really means is people will instead substitute the inferior good, i.e. consume more paper goods (i.e. paper cups vs plastic cups, boxes, etc) which means killing more trees.

What's wrong with killing trees? No, I'm being serious. The paper that's used in packaging isn't old growth or rainforest, it's in forests maintained by paper companies for just this purpose. While trees are growing, they suck carbon out of the atmosphere. Once they reach maturity, this processes slows down. The trees are then cut and turned into lumber/paper goods and new trees are planted in their stead.
posted by justkevin at 8:31 AM on July 31, 2006

There is a lot of misinformation about the subject, but there are some great resources as well. The best 'primer' on the subject is probably from Matthew Simmons in "Twilight in the Desert" - a book that is highly technical in many regards, but does an excellent job.

Simmons is one of the rare analysts who has the ability to speak with great authority on the subject and be taken seriously because he has worked within the industry and also within the greater petro-dollar-political context as well (was an advisor to Bush).

Remember - the real point is not that oil is going to run out tomorrow. It isn't. The question is whether or not we will be able to supply an ever-increasing demand, and at what price. So far, pundits such as the legendary (I say that sarcastically) Daniel Yergin have been wrong time and time again when asked about market trends and analysis of oil. This is the guy who claims oil is good for another 100 years and will drop to $30 soon enough.

He's been saying this crap for five years now.

Peak Oil adherents' greatest claim is that the era of *cheap* oil is over, not that we are running out in the next five, ten or even twenty years. There's also a lot of misinformation, clack of transparency and external geo-political threats that just raise the bar even higher.

Make no mistake, Oil is about as necessary to modern life as water is to...well...life. The clock is ticking and we need to get moving to alternatives.
posted by tgrundke at 8:33 AM on July 31, 2006

Sorry for this lengthy response, I did a long term paper on this very topic (or actually whether there is any correlation with inflation and other economic indicators and volatility in the oil markets). The reason alternatives have not come up, as far as alternative supply sources is that it is simply not known whether the Saudi national oil company can bring oil back to $20 a per/b. While it seems unlikely, there is a lot of the large Saudi oil fields we simply do not know (see: "The Coming Saudi Oil Crisis"). If prices maintain at this level and demand goes down as a result (it hasn't), then I would worry seriously about the ability for cheap, light crude. There is plenty of carbon reserves for any of our lifetimes -- the capital expenditure to reach those reserves would be ridicuous should any super-oil fields open up and begin feeding us light, sweet crude again (very possible). Oil fields are incredibly complex creatures and the uncertainty and risk involved in extracting oil is what is driving up oil prices, not the absence of oil per se. There is something like 3 times as many barrels of oil in US coal and oil shales than there ever was in the ground in Saudi Arabia.

Sorry this is upsetting as someone who did countless hours of research and statistical analysis (again from more of an economic perspective than a geological one). Yes oil is finite and yes there will be a time when we cannot extract anymore oil. No one has any clue when that will be. The only fact we know is that supergiants which we rely upon and have relied upon in the past are having a harder time extracting oil without further field development (more water pumping, more compelx drilling, etc.).

High volatility is good only for oil company executives and shareholders (and in full disclosure, I am one). Too high volatility and GDP, inflation and employment all begin to suffer as businesses must spend more to hedge against the volatility risk. I do not think there is any malicious intent, or large Syriana conspiracy to keep volatility high -- but the way the free market itself is structured lends itself to some sort of emergent behavior that would be very, very interesting to study in the future.

And one more thing, while I am not a huge fan of Aramco they have done a very, very good job from what I can tell in correctly managing their oil fields. From my somewhat limited understanding of the extraction process one maximize profits in the short-term by damaging oil fields (I believe Saddam did this to a large extent which is why we are having trouble bringing those oil fields back up to pre-war levels), or one can maximize long-term profitability and extend the life of the field. Aramco has been really top-notch and better than a privatized oil company that would have had too much incentive to damage the oil field or really abuse the markets (the Saudi fields are unimaginably large and really up until the last few years could have flooded the market with oil so cheap it would put everyone out of business).

And one other thing. When doing the Kyoto and environmental section of my research I found the very simple concept that increased efficiency actually increases consumption. So all you Prius drivers are perpetuating oil usage moreso than those driving Hummers. Mind blowing, and I have the math if anyone really wants to challenge it. If anyone takes anything away from my long, rambling speech it is that oil and hydrocarbons are here to stay for a quite some time. Let's deal with the side effects as best we can and stop closing our eyes and wishing we'd all have VW Rabbits that ran off puppy love. Or we can keep reading Pulitzer-wannbes and contribute to the high oil prices and pad the pockets of those who control the world (extraction costs have not gone up anywhere near the per/b cost of oil has -- yea profit margins!)
posted by geoff. at 8:34 AM on July 31, 2006

Oh geeze, there's plenty of carbon reserves that can be converted to gasoline. We should focus on reducing pollution instead of moving to a new energy source. Carbon will be the cheapest and easiest to obtain energy source in the forseeable future. Let's focus on making the extraction and use of the energy as clean as possible instead of devolving into end-of-the-world oil shortage scenerios which just end up driving up the price of gas.
posted by geoff. at 11:11 AM EST on July 31 [+fave] [!]

Okay, I'm going to profess ignorance on the "carbon" issue again. Thanks to some very helpful explanations, I understand how carbon sinks are important to maintaining a CO2 balance and destroying said sinks contributes to the greenhouse effect, but I don't think you can convert "carbon" to gasoline without expending considerably more energy that you'll get out, unless "carbon" means something other than the C on the periodic table.

And even if you could do this, doing it at $47/gallon doesn't really solve the problem.

On another note:

what with people in their Hummer H3s thinking they compromised and bought an environmentally friendly vehicle, instead of the regular old military grade one that coulc take a grenade.

Enough with the Hummer. I know it makes for funny Daily Show monologues, but only about 40,000 hummers are sold each year out of a total of 7.6 million new car sales and 8.6 million truck, van, and SUV sales. In fact, small, med, and large SUV's make up only a total of about 4.5 million new vehicles, out of the 16 million total.

To focus on something so completely insignificant is to miss the point entirely.
posted by Pastabagel at 8:37 AM on July 31, 2006

All of you who take the Simmons book as gospel. Remember - the man is talking his own book. He is an energy Investment Banker. High energy prices = higher O&G asset values = bigger commissions on M&A transacations.

Not saying its filled with falsehoods, just be aware of his motivations.
posted by JPD at 8:44 AM on July 31, 2006

So all you Prius drivers are perpetuating oil usage moreso than those driving Hummers. Mind blowing, and I have the math if anyone really wants to challenge it.

Let's say within the US that you have a pool of 1000 drivers who all need to get to and from work.

500 choose to drive a Prius 50 miles a day to and from work, and the other 500 choose to drive a Hummer 50 miles a day to and from work.

It seems pretty obvious that encouraging Hummer drivers to switch to a Prius would reduce overall gasoline consumption.

With everyone driving a Prius-equivalent, there might be less pressure to decide whether or not to do those other "less necessary" car trips, granted, but you seem to be arguing that those less necessary trips will bring consumption up to pre-hybrid levels. Or perhaps manufacturing and maintaining a Prius uses more oil than manufacturing and maintaining a Hummer?

So, yes, I would be interested in seeing the cost model you're using and the assumptions you are making.
posted by Blazecock Pileon at 8:44 AM on July 31, 2006

geoff, that thing about increased efficiency leading to increasing consumption is called Jevon's Paradox or the Rebound Effect.

Nice to see peak oil being discussed here, if I remember correctly, I was the second MF user to bring it here, back in 2003 (sorry for the self indulgence)
posted by samelborp at 8:45 AM on July 31, 2006

The reason alternatives have not come up, as far as alternative supply sources is that it is simply not known whether the Saudi national oil company can bring oil back to $20 a per/b.

Consider this: Country X is a huge manufacturing economy that runs an ever increasing trade surplus with the US. While under normal circumstances this surplus would raise X's currency relative to the dollar, in this particular instance, X's currency is basically pegged to the dollar (and some other things, and it fluctuates slightly, but not much). Therefore, the currencies don't change relative to each other.

But oil is traded on the world markets in dollars, and X needs to buy more and more oil to fuel its growing manufacturing economy. So instead of the dollar dropping relative to the X currency, it falls relative to the price of oil (i.e. there is a net increase in oil price as too-large dollar inflows to X get spent on oil)

Guess which country X is.

(please help correct this analysis if it needs it, because I think the China-oil-dollar issue might be the key to working out much of what is going on everywhere)
posted by Pastabagel at 8:46 AM on July 31, 2006

Oh geeze, there's plenty of carbon reserves that can be converted to gasoline. ... Carbon will be the cheapest and easiest to obtain energy source in the forseeable future.

Sure, they just cost more. EROEI, diminishing returns, and so forth. If it takes two barrels of oil to get one, and all that. The value of carbon is not just that it supplies energy, but that it supplies cheap energy. When it ceases to be cheap, major changes will be in the offing. As for "the foreseeable future," that all relies on the really big, unknown X factor: the depletion rate, and that may be much higher than we've previously been led to believe.
posted by jefgodesky at 8:54 AM on July 31, 2006

carbon reserves

Sorry to be naive here, but is that another word for coal, or does it refer to something else?
posted by psmealey at 8:59 AM on July 31, 2006

Pastabagel, your explanation makes me think of "triangle trade" -- is that what this is?
posted by pax digita at 9:02 AM on July 31, 2006

The idea that we all need to be driving around with internal combustion engines or hybrids, for that matter, is a myth perpetuated by oil and auto industries. The future is electric. The technology is there. The demand is increasing.

My next car will be electric.
posted by eperker at 9:05 AM on July 31, 2006

Their swimming pool heating bill in October topped $2,000.

Bwhahahahahah.

A businessman in a BMW, hearing that a fraction of his tankful originated in Iraq, snorted, "In that case, it should be free."

*sob*.
posted by NewBornHippy at 9:22 AM on July 31, 2006

In fact, small, med, and large SUV's make up only a total of about 4.5 million new vehicles, out of the 16 million total.

If you have a quarter of the vehicles consuming 50-100% more than the other 3/4, though, you essentially could decrease the demand by 10-20% if people just quit driving them (or, dramatically cut back). That's significant.

Those are quick-guess numbers, of course. I don't know if SUVs actually consume 50-100% more than most other vehicles. I doubt it, not because I doubt that a Chevy Suburban consumes 50-100% more than my Geo Prizm, but because I'm guessing the other 3/4 of vehicles includes trucks and luxury sedans, which are probably on-par in consumption.

I don't think that changes the likelihood that when people buy larger vehicles than they need, it has a real impact on gasoline prices for everyone. I've no scorn for forest rangers or carpenters and even real outdoor enthusiasts, but I hope the people buying Hummers that will never see a dirt road do feel some shame.
posted by weston at 9:39 AM on July 31, 2006

About Laura Binning:

Binning pulled her black H2 Hummer into the station one Saturday afternoon when Qua Iboe crude from Nigeria made up about 26 percent of her $72 gas purchase. She was taking her son Parker, 8, to Little League. She estimated, sheepishly, that her vehicle gets 10 city miles per gallon, moderately better than a semitrailer truck.

"At first it's on your mind," Binning said. "But then you get so busy. I got screaming kids. My mom's got cancer. And I work as a real state marketer out of my house. So you forget."

(...)

But as it happened, the Binnings were among the few gas station customers to ponder America's energy future beyond tomorrow's uptick in gas prices. They grappled with buying an electric-gasoline hybrid vehicle as their next car. They followed the news about peak oil. They fretted over the kind of world their three rambunctious boys--Weston, 3, Spencer, 6, and Parker--would inherit.

Point #1: She's definitely not "clueless." Obviously she is worried about the implications of peak oil. Whether her lifestyle is really too busy to consider the oil crisis in detail or whether she's just using her busy lifestyle as an excuse, I don't know, but I'm inclined to believe her.

Tim [Binning] was at work in his car, a new Volkswagen Phaeton, a luxury sedan that the couple decided to purchase instead of a hybrid. (Laura worried about trading in the devalued Hummer at a loss.) The sensor-activated wipers slapped away a gray slush, and a satellite navigation console glowed on his dashboard.

Point #2: Laura and Tim did, eventually, do something about their worries. Arguably, of course, they did the wrong thing: their fuel economy has only marginally improved, from an estimated 8-13 mpg to the Phaeton's 16-22 mpg. Buying that hybrid vehicle would have put them at least in the mid-20s; a Lexus RX400h, by no means a thrifty hybrid, still gives you an estimated 27-31 mpg. Even taking into account the EPA's lofty estimates for hybrids, that's still a real-world average higher than the Phaeton's.

But the point is that eventually the Binnings decided life with the H2 wasn't worth it. Their reasons were probably driven more by cost than anything else, but they did react, contrary to some of the comments upthread.

The real issue here is that everyone wants to maintain their current lifestyle. Decades of conspicuous consumption, driven in part by the postwar need to absorb excess industrial production now that the United States didn't have to build thousands of Flying Fortresses, have taught entire generations that a reduction in the amount of stuff you have is a reduction in class, and that money—and how you choose to spend it—is a metric of intrinsic merit.

So yes, the fact that the Binnings paid $2,000 to heat their swimming pool in October (October! Who swims in October in Chicago?!) is laughable. But everyone exhibits this sort of reluctance to let go and pare down. I still get a ride to the subway instead of taking suburban transit, despite vast improvements in service. I still leave my computer on at night to download torrents. This is the way it has always been; this is the way, foolishly, I wish it to be in the future. The Binnings are an easy target because their extravagant lifestyle is so out of touch with the realities most working-class people have to deal with, but their mistakes are our mistakes as well.
posted by chrominance at 9:59 AM on July 31, 2006 [2 favorites has favorites]

Another in-depth peak oil site worth checking out is The Oil Drum.

Previously mentioned here.
posted by Sloben at 10:03 AM on July 31, 2006

To focus on something so completely insignificant is to miss the point entirely.

You've missed my point entirely. And, obviously you've never spent any time in Alberta. SUV sales here are a sign that people aren't willing to compromise a very consumptive lifestyle - which is the alarming bit, not the fact that Hummers aren't really so big an issue. It's the utter excess in the face of so much uncertainty that I find troubling.

My next car will be electric.

Who Killed The Electric Car?

A serious problem with alternatives is the portability of energy, and the supply chain of that energy. Personally I think nuclear is the future, but run an electric car in Alberta right now and it'll actually be powered by coal combustion.
posted by jimmythefish at 10:06 AM on July 31, 2006

From the sidebar "The nature of oil":

No one has yet synthesized crude from dead plant matter.

This is not strictly true.

Changing World Technologies has built a pilot plant next to the ConAgra Butterball turkey plant so that they could convert turkey waste and offal in to light, sweet crude oil. It's working, but their oil is priced way to high to be viable. The main reason for this is that the company had expected turkey waste to be free in the wake of mad cow disease-inspired legislation preventing the reuse of waste as feed, but these laws only apply to cow waste, not turkey waste.

Also, while this technology may help bring down the cost of oil, it does nothing about Jevon's Paradox or the pollution associated with using all that oil.
posted by ObeyScient at 10:17 AM on July 31, 2006

Ah yes...I realize turkeys are not plants. :-[ But the TDP can be used on many types of organic inputs, the composition of which, after heat and pressure, is more or less chemically equivalent to that of plants.
posted by ObeyScient at 10:19 AM on July 31, 2006

ObeyScient,

This won't work for chickens, though, because everyone knows that if there's chicken in the car, the car won't go. Bummer.
posted by jimmythefish at 10:26 AM on July 31, 2006

Those are quick-guess numbers, of course. I don't know if SUVs actually consume 50-100% more than most other vehicles. I doubt it, not because I doubt that a Chevy Suburban consumes 50-100% more than my Geo Prizm, but because I'm guessing the other 3/4 of vehicles includes trucks and luxury sedans, which are probably on-par in consumption.

weston - those charts I linked to have fuel economy info for each vehicle class. Note that for small SUV's the mileage is about 25mpg, far from gas guzzler territory.

And, obviously you've never spent any time in Alberta. SUV sales here are a sign that people aren't willing to compromise a very consumptive lifestyle

Sorry, if I misunderstood, but to be fair, and this may be my ignorance of Canada, but maybe people drive SUV's in alberta because they are better in the snow than smaller cars? My point is that Albertans may have smoe good reasons from driving SUVs whereas people in New Mexico probably don't.
posted by Pastabagel at 11:19 AM on July 31, 2006

chrominance: I still get a ride to the subway instead of taking suburban transit, despite vast improvements in service. I still leave my computer on at night to download torrents.

The Binnings are an easy target because their extravagant lifestyle is so out of touch with the realities most working-class people have to deal with, but their mistakes are our mistakes as well.

I'm not so sure. When you snag a ride to the subway, you (presumably) do so because it's more convenient, expedient, and easier than catching a bus there. When you leave your PC on at night to participate in a torrent, you're getting access to data that you otherwise would not have. In both situations, you are spending some energy and enjoying a readily-identified benefit in return.

I think that's different from choosing the H2 as a family car. The H2 is both more expensive to buy and actually a worse choice for a family car in almost every way (space, comfort, performance, ingress & egress, park-ability, safety - for those inside and outside) than a conventional sedan or minivan. And the H2 gets something like half the gas mileage.

So I think the reason that the SUV-as-family-car trend angers so many people so much is because it's beyond merely wasteful - it's actually entirely stupid. It's like illuminating one's house with burning baby seals. It's wasteful and expensive, it's needlessly hurtful and dangerous, and on top of everything else, it doesn't actually work particularly well.
posted by Western Infidels at 11:19 AM on July 31, 2006

So all you Prius drivers are perpetuating oil usage moreso than those driving Hummers. Mind blowing, and I have the math if anyone really wants to challenge it.


Unless your math says that the Hummer drivers will bring about an oil crisis faster, thereby forcing people to turn to alternative energy sooner, your assertion is either false on its face, or "perpetuate oil usage" means something other than what I think it means.

Because to me, "perpetuate oil usage" means to drive up the rate at which the US consumes oil. It cannot be that choosing a lower-consuming (more efficient) machine over a higher-consuming machine will increase the energy used.
posted by adzuki at 11:23 AM on July 31, 2006

Well, geoff?
posted by Blazecock Pileon at 11:24 AM on July 31, 2006

Without affordable oil, there's no affordable food.

Peak Oil, Peak Grain, and Peak Water

"Once the ethanol plants open, we will link the price of petrol to the price of bread, because the price of wheat will be settled by who pays more, the oil industry or the food industry."

I don't think anyone's making ethanol from wheat, but if the USA does continue to insist on trying to make ethanol from corn, this might start to be a problem just as grain yields start falling due to global climate change.
posted by sfenders at 11:34 AM on July 31, 2006

Aramco has been really top-notch and better than a privatized oil company that would have had too much incentive to damage the oil field or really abuse the markets

Any oil company that owns and feels secure in its resources will roughly follow a Hotelling model. A private company that owned the Saudi fields wouldn't have an incentive to damage the field unless it foresaw the field being seized.

And the fact that the math in your model works out doesn't necessarily make your model correct.
posted by Kwantsar at 11:40 AM on July 31, 2006

geoff,: I found the very simple concept that increased efficiency actually increases consumption. So all you Prius drivers are perpetuating oil usage moreso than those driving Hummers.

Blazecock Pileon: With everyone driving a Prius-equivalent, there might be less pressure to decide whether or not to do those other "less necessary" car trips, granted, but you seem to be arguing that those less necessary trips will bring consumption up to pre-hybrid levels.

I'm also skeptical that "you Prius drivers are perpetuating oil usage more so than those driving Hummers," but adzuki goes too far:

adzuki: It cannot be that choosing a lower-consuming (more efficient) machine over a higher-consuming machine will increase the energy used.

That's only going to be true if the market for the product in question (transportation, in this case) is completely saturated already. Maybe in this specific case it is, maybe it isn't, but that's not a principle you can count on.

More-efficient machines will tend to be used more than less-efficient machines, of course. Per-capita energy use in general has been on the rise for hundreds of years, even as (and arguably partly because of) our ability to use that energy efficiently has improved.

Consider, however, that an H2 reportedly gets about 12 MPG. Prius owners average about 4x that, and a few manage 5x that. That's a huge gap; it's quite a presumption to suppose that a driver who switches from an H2 to a Prius will begin to consume more fuel, by driving 6x as much.

Suppose that the average car in the US gets 20 MPG. Suppose we were able to wave a magic wand and instantly replace every single car in the country with a next-generation hybrid that achieved 60 MPG. Is it realistic to suppose that miles driven per-capita would rise, because driving had become cheaper? Absolutely. Is it reasonable to suppose that gasoline consumed per capita would increase, i.e., that miles driven per capita would more than triple?

You can probably already guess what my answer would be: no way. The gap from 20 MPG to 60 MPG is just too large. No one has the time, inclination, or for that matter the road capacity to do that much driving.
posted by Western Infidels at 11:58 AM on July 31, 2006

A few things here - there is concern with Ethanol that as demand rises, farmers will plant more corn (lord, like we need more of the stuff here in the midwest...) and less of other crops. Combine this with water shortages, etc. and you've got a real problem.

Speaking of water - one of the problems with shale/sand oil, as they are discovering in Alberta, Canada is that the resource requirements to get the stuff are astronomical and the pricetag is equally scary. There are now some real environmental concerns about lack of water as a result of the oil sands/shale projects.

As with ARAMCO, one of the biggest problems we have is that since 1982 they have not released any verifiable or reviewable statistics or information about their reserves/production, etc. We rely on their own numbers without verification and then the oil analysts have to rely on 3rd parties to extrapolate the rest of their information. For example, they will look at who is selling what quantity of drilling equipment, especially specific types of drilling equipment, or numbers of oil barges leaving the port, or the number of new pipelines being built, or the volume of water being pumped into the existing wells, or the size of the pipes being used to built those networks, etc.

Scary to think that our producer of last resort doesn't see it fit to inform us if the gas tank is half full or not. Therein is Simmon's key argument.
posted by tgrundke at 12:02 PM on July 31, 2006

Pastabagel, I was using carbon as shorthand for other reserves of energy that can be converted to gasoline using known methods and practices -- non-traditional supplies of oil. With the exception of the turkey oil plant in Troy, Missouri it is going to be coal, oil shales (tar) or heavy crude that previously had no real economic value. Off the shore of California there is a ton of heavy crude and shale reserves (I am nearly sure it is the West Coast) -- also with new technology or old technology that was previously too expensive to implement increase the proven accessible reserves. I think it has been linked here before but many of the coal -> gasoline techniques were used by Nazi Germany and I believe in certain special limited industrial processes today. The point is that if we needed to with the technology at hand we can start making oil with domestic reserves. If I remember correctly, without any increases in technology a coal -> oil process can be had for $50 a barrel. The initial capital costs are enormous and investors want to make sure that the current high prices are here to stay and not due to artificial causes and there really isn't that much accessible oil.

Also the EROEI (energy returned on energy invested, I may have the acronym turned around) concept is an interesting one and valid from a geological or physics point of view but does not really carry over so well in the economics sense. It would be fallacious to believe that a doubling of the energy cost to take oil out of the ground or convert whatever to oil would directly correspond with a doubling of costs. A whole lot of things can keep or decrease costs when manufacturing or pumping oil. I think it is really apparent that the true costs of pumping oil is not reflected in the market price (going to be really fast and loose with prices here, but it is something like $7-$10 to pump Saudi oil, the point being it is incredibly low -- Texas fields and mature oil fields are more expensive to pump).

We can get really technical really fast when talking about commodity prices, pegged currencies and international trade. Someone more versed in this may school me, but while China's energy needs are a very large part of the current surge in oil prices I wouldn't so quickly attribute it to the peg. There's a lot at play obviously and your model seems right in one of those perfect blackboard simulations.

Personally I'm less concerned with the price of oil or what is causing the oil to go up as to what oil shocks (one standard deviation jump in cost) will due to the economies. I am again getting way off topic here but it should be noted that since 1981 oil shocks and inflationary responses are rather non-linear. That is as we moved away from a manufacturing economy, and a slew of other reaosns, large oil shocks do not create the type of inflationary rises that one would logically think they would (Hooker, Are Oil Shocks Inflationary? 2002) A good example of this would be the very small inflation increases we are seeing to the large increase in oil prices. I am very concerned about the third world countries that are experiencing and experienced unprecendented economic growth in the 90s and on. Energy prices play a larger role in their economy and they are much more sensitive to their effects.

There's a lot of debate as to whether this is true, whether oil shocks cause recessionary periods or merely accompany them and what role monetary policy should play in oil increases. Fed Chairman Bernanke wrote a long, somewhat technical paper on the role of monetary prices in maintaining a healthy economy in the event of oil shocks.

And as I am getting way off track here, my biggest gripe with Hubbard's peak oil is that he was so successful in predicting domestic oil production rates (though he was off on the tails, we're recovering oil not thought possible before) was because US oil fields and reserves were very well known and well studied. As someone else pointed out the "Twilight in the Desert" is not a bible but the research he put into the book and what he had to do to arrive to his conclusions illustrates the state of the oil economy today. No one has any idea how much oil is left, where it is at and how much it will cost to extract it. We can come to rough approximations and it is unlikely a huge Saudi-like field would be discovered in the future but only very lucrative sections of the earth are put under the rigorous oil exploration microscope. My guess is that we will continue to see a decentralization of oil supplies from a multitude of sources (small wells from all over the world, coal conversion, etc.) that will have a net effect of decreasing volatility and oil shocks.

In any case this is an incredibly intricate and detailed subject that this article does not do justice. I realize that people do not go to the Chicago Tribune for peer-reviewed journal articles but we're not talking about a snake that ate an electric blanket. Globe warming not really a debate, the future of our oil economy on the other hand will garner 5 different opinions from 4 different academics as the joke goes. The one thing all serious researchers in the area (Hamilton, Hooker, Bernanke, et al) agree on is that the oil economy is here to stay until the oil runs out. And that seeing something totally unforseen, such as Aramco and other Arab nations completely fabricating reports and hiding maturing oil fields by overproducing younger ones, we should be able to deal with oil shocks as we have done in the past.

And just for kicks I should add that even if oil prices fall dramatically, say to $40-$50 per/b, their weird asymmetric nature dictates that not much will really happen to our economy as a whole.
posted by geoff. at 12:02 PM on July 31, 2006 [1 favorite has favorites]

Kwantsar, I don't think the Hotelling model is particularly relevant to crude oil. It probably would be, roughly, if the amount that could be produced wasn't limited by other factors such as the fact that oil gets harder to produce the less there is left. But whatever the reasons, oil prices have never followed anything much like what's predicted by Hotelling's rule.
posted by sfenders at 12:08 PM on July 31, 2006

Sorry, if I misunderstood, but to be fair, and this may be my ignorance of Canada, but maybe people drive SUV's in alberta because they are better in the snow than smaller cars?

No. There's actually very little snow in Calgary compared to, say, Ontario, and it's pretty flat here too. A regular car is all you need, but people buy trucks for social status reasons as much as anything else. It's boom time here (thanks oil) and nobody seems too concerned about conserving anything - be it oil or land or water.

I have a Miata which I only drive in the summer, live downtown and ride my bike or take transit when commuting, and I get laughed at by my suburbanite acquaintances who wonder when I'm gonna get a 'real' vehicle and that I'll need it when I buy a proper house in the suburbs somewhere - as if it's some sort of an assumed path in life.
posted by jimmythefish at 12:08 PM on July 31, 2006

I see I pissed of Prius owners. Obviously on the individual level you're not going to increase oil consumption. Let me try to explain the Jevons Paradox as best I can as to how it applies here:

Say you have a machine that takes 2 units of energy to produce 300 widgets. I come out with a machine that can do the same with 1 unit of energy. Am I going to reduce operational costs and keep on producing 300 widgets or am I going to produce 600 widgets? It is shown that economies will increase production to 600 widgets.

Think of it this way. You have $500,000 to build a house. That used to be able to make a house with 5 bedrooms. Now with various improvements you can either have a 5 bedroom house for $400,000 or a 9 bedroom house for $500,000. That's a little bit more non-linear and more of what I understand the Jevons paradox to be. While many here concerned with conservation will pick the $400,000 on grounds that excess is waste, that is not true historically and for the population at large.

Driving a Prius saves gas. This allows more gas to be on the market to accomplish the same goal. This depresses gas prices and allows more people to drive. The Wikipedia article discusses the great example of the more efficient Watt engine (the Prius) over the Newcomen (the Hummer) engine. Coal consumption actually rose as it was now economical to use the Watt engine where human or animal labor was operationally less expensive until the more efficient engine was introduced. So yes, your Prius is a good thing in that will allow greater economic output on the whole. You must realize that the paradox as I understand very narrowly takes about improved efficiency of existing energy sources. This is a good as it allows more things to be produced, and should not be seen as a reason to not improve efficiency.

Do not think that overall consumption will go down if everyone tries really hard, the reality of the situation is quite different. Perhaps if everyone lived to Western standards, but as you know that is not the case. Really oil is not the problem, it is the pollution. The two are perhaps not as intrinsically linked as we assume. I cannot believe a way to trap the pollution or signficantly reduce it cannot be devised, the problem is there is no real finanicial incentive to do so (which is what Kyoto and Montreal is trying to do -- creating incentive where there was none before).
posted by geoff. at 12:28 PM on July 31, 2006

while China's energy needs are a very large part of the current surge in oil prices I wouldn't so quickly attribute it to the peg. There's a lot at play obviously and your model seems right in one of those perfect blackboard simulations.

Let me clarify, I'm not suggesting China's oil needs are tied to the peg, I'm suggesting that absent a peg, Chinense goods in the US would be more expensive, the US would consume fewer of them, and thus China would need less oil.

In other words, oil is the de facto chinese currency - investors would would have bought yuan all other things being equal now buy oil because the yuan doesn't move.

I believe part of the reason we haven't seen the inflation in the US is because we are still getting cheap chinese goods that are priced in the fixed exchange rate environment.

Again, something about this model doesn't seem right, I just can't put my finger on it, but it certainly seems to explain explosive chinese growth with rising oil prices and very moderate US inflation.
posted by Pastabagel at 12:31 PM on July 31, 2006

geoff: If I remember correctly, without any increases in technology a coal -> oil process can be had for $50 a barrel.

That sounds about right. Of course, you can guess what would happen to the price of coal if that process started up on a large scale. (It would develop a close relationship with that of crude oil.) It would take more time than switching to electric cars, which I guess will have a relatively more immediate impact when it happens.

oil shales (tar)

Shale oil is not tar (or oil, or shale). It's kerogen or something, so I heard. Whether it will be useful as a big source of energy is yet to be seen.

my biggest gripe with Hubbard's peak oil is that he was so successful in predicting domestic oil production rates was because US oil fields and reserves were very well known and well studied.

Your biggest gripe with Hubbert is that he was correct? Interesting. The model has been applied with some success in other areas as well, but I suppose you could well argue that they too were well-explored in advance. I suspect that's true of just about everywhere there's likely to be large quantities of oil to find. Of course it is still all very uncertain, as you say.

As for Saudi Arabia, things look somewhat worse there than they did when Simmons came out with his book on the subject. It's hard to guess why their production has declined lately, but between that and the recent developments at Cantarell, the odds of "peak oil" happening real soon now have gotten a lot better than they looked last year. I'm still betting on 2008.
posted by sfenders at 12:35 PM on July 31, 2006

geoff - good summary of points there, and I agree wholeheartedly.

The lack of solid, verifiable information on supply is very very troubling and is a large part of the reason why prices are so wacky these days.
posted by tgrundke at 12:52 PM on July 31, 2006

I think perhaps what doesn't seem right in your model is the number of assumptions and the size of effects of oil prices on Chinese goods. Manufacutring since the 70s has been sensitive to oil shocks and the effects on business. China's main competitive advantage (again in my opinion, I'm sure others can argue differently) are cheap labor costs and somewhat abundant coal reserves. I think any increaes in costs would definitely come from the transporation and not from the actual good itself, this is assuming that Chinese manufacturing has taken the same course as Western manufacturing, which it undoubtedly has.

Keep in mind that that as investors buy oil they need American dollars to do so, as both major exchanges are owned by American companies and traded in dollars. An increase in the demand for dollars (to buy oil) depreciates the foreign corrency. That the yuan is so undervalued and so artificial that energy and perhaps commodity prices begin to reflect this then we come to the conclusion that the real price of a good would stay constant. That is oil and other commodities would decrease in price as the yuan would appreciate against the dollar.

The only problem I have with the yuan being incredibly undervalued is that if it was the system would collapse on itself as the government would have an increasingly hard time maintaining the peg. This has happened in the past to smaller companies and a collapse of the Chinese economic system would be an incredibly bad thing. Anyway, without some statistical data and correlation to back this up we are just kind of bullshitting through this unfortunately. Give me some alpha and beta tests dammit.
posted by geoff. at 12:53 PM on July 31, 2006

sfender my gripe is not that he is correct. I was unclear there, my gripe was that the domestic supplies at the time were more or less completely known. He was also already very close to the peak oil date, so no new amazing technological advances had to be factored in. The United States oil supply in the 70s cannot be compared to the world oil supply. There are way, way too many unknowns. We don't even know how much oil is left in old fields in the Middle East -- using Hubbert's methodology would provide incredibly divergent results depending on what data is there. Yes if we had an accurate picture of oil supplies we could create a peak oil graph for the world -- I am not debating that. I am simply stating that we do not know. "Twilight in the Desert", which again I am recommending if you are interested in this sort of thing, illustrates how little we know -- even if you do not agree with his conclusions you must agree that we know jack and shit and jack left yesterday.
posted by geoff. at 12:58 PM on July 31, 2006

Electric is not the future. Nuclear is not the future. Ethanol is not the future. The future is less energy consumption, and less complexity. Complexity is a function of energy, and we're peaking the most efficient energy source on this planet right now. Everything else from here on out is simply a question of how voluntary and smooth, or how involuntary and violent, we want our transition back to a state of equilibrium to be. It was a fun 10,000 year ride (well, for the aristocracy), hopping from one energy source to the next, but this is the end of the road. If we can recognize that, we can take the least disastrous road open to us, a voluntary "powerdown" like Richard Heinberg advocates. If we keep hoping and praying for some magic bullet like coal, nuclear or ethanol to save us from the consequences of our lifestyles like a deus ex machina, then we'll still end up at the same point—we'll just be forced to it in a much less pleasant manner.
posted by jefgodesky at 1:02 PM on July 31, 2006

A model reaching geoff.'s conclusions does not seem that hard to cook up, actually, for either meaning of 'perpetuate' referenced upthread (either 'to continue, as opposed to discontinue', or 'increase the use of').

You simply have a population assumed to strongly prefer automotive travel over, say, mass transit, such that if a particular person p can afford some form of automobile that person will then always choose an automobile over mass transit. To simplify further, we could even assume hummers will always be preferred over less-expensive or less-wasteful automobiles. Then, the basic analysis goes:

in a world with just hummers, if the cost of a hummer is such that only the top p of the population (by income or wealth, it's not an important part of this model) can afford one, then the expected energy usage is:

(p * hummer_energy + (1-p) * mass_transit_energy) * population_size

and in a world with priuses, hummes, and mass transit, if the top p can afford hummers and there's q in the range of people who can afford priuses but not hummers, then we get

(p * hummer_energy + q * prius_energy + (1-p-q) * mass_transit_energy) * population size,

which means for prius-world to use more energy than the world without the prius we'd just need the prius to consume more energy than mass transit, which seems reasonable, and we've thus hit the 'increased' meaning of perpetuate; as far as the perpetuate meaning of perpetuate, if p+q of the population is driving, you can introduce some external assumptions that they'd be more motivated to keep society on that track.

If we instead cook up a different model, in which people prefer automobiles to mass transit but would exclusively choose priuses over hummers even if they could afford both, then the comparison for p able to afford hummers, q able to afford priuses, q > p becomes:

p*hummer_energy + (1-p)*mass_transit_energy < q * prius_energy + (1-q)*mass_transit_energy which, if we solve for q, yields q> p * (hummer_energy - mass_transit_energy) / (prius_energy - mass_transit_energy)

which in turn translates into a question about how you assume the prius is priced vis-a-vis the hummer, and how you assume the relevant resource is distributed.

Or, put more simply: if there is less-expensive option that still uses oil, the ensuing greater use of the product more than makes up for the greater efficiency of the product.

The above model has its faults: the 'price' of the car is probably better modeled using the cost of driving it for a year, and that in turn suggests that income, not wealth or some hybrid metric, is the right variable to keep track of. I doubt it's that accurate of a model, but it should be sufficient to show that, if you can assume the right things about income distribution and preferences, then it would not be that hard to cook up a model in which the availability of more efficient -- and, ergo, more affordable -- transportation options resulted in both a net increase in energy consumption and, also, a perpetuation of our current reliance on oil.

I'd be curious to see what geoff did, because I'm sure the thesis work is going to be much more rigorous than a model cooked up on the fly to demonstrate the existence of a model that might lead to his conclusions.
posted by little miss manners at 1:03 PM on July 31, 2006

Pastabagel: those charts I linked to have fuel economy info for each vehicle class.

The BTS charts? I only see total new sales. Can you point me to the ones with fuel economy?
posted by weston at 1:05 PM on July 31, 2006

Meh. My response to pracowity was totally useless and a perfect example of why people have left this community in the past. A comment makes me angry and instead of stating why I disagree with it, I tell someone to fuck off. I flagged it as noise and praco, I apologize for flying off the handle at you rather than actually responding to the issue.
posted by weretable and the undead chairs at 1:06 PM on July 31, 2006

On preview: I'd still hope the model geoff used is more detailed and more rigorously justified than the above, but some more explanation has been forthcoming. Is the thesis readable anywhere?
posted by little miss manners at 1:06 PM on July 31, 2006

weston -

Sorry, the linked charts DON'T have that info. These BTS charts do:
CARS
TRUCKS

My bad...
posted by Pastabagel at 1:15 PM on July 31, 2006

sfender: Argh I should have read your entire comment. You are assuming that coal would be bought at market prices and then converted. Even if this were the case coal is much more abundant and in much less politically instable regions. The $50 model runs on a lot of assumptions but one it does not is improved efficiency of the process which would almost assuredly occur -- I would wager that prices would fall below $50 once it matures and money is poured into it. Still, the profit margins would be thin and that is why you see the hesitation now to not dump all sorts of capital in this. This can be done very quickly, much more quickly than it would be for everyone to reinvest in an electric car.

The electric car would be more ideal as the pollution can be controlled centrally, but probably much less expensive overall to convert coal into crude. Think of all those vehicles now wasted.
posted by geoff. at 1:16 PM on July 31, 2006

little miss manners I don't mean to disappoint you but it was an undergrad term paper (albeit a rigorous one) rather than a thesis. I do plan on going for my doctorate and continuing research in this though. It was more synthesis and research than formulating new ideas. As the point of the paper was generally recessionary effects and oil shocks (whether the correlation was statistically significant and which factors that indicate a recession would tell me this) -- I did cover more broadly Kyoto, the Jarkons Paradox and a few other related items. When I get to the workstation that has a copy of it I will e-mail it to you. If you have access to journal articles online here are some of the more interesting sources I pulled from:

Hamilton, JD. Oil and the Macroeconomy since World War II. The Journal of Political Economy, Vol. 91, No. 2. (Apr., 1983), pp. 228-248.

Jennie E. Raymond; Robert W. Rich. “Oil and the Macroeconomy: A Markov State-Switching Approach” Journal of Money, Credit and Banking, Vol. 29, No. 2. (May, 1997), pp. 193-213.

Hooker, Mark. Are Oil Shocks Inflationary? “Asymmetric and nonlinear specifications versus change in regime” Journal of Money, Credit and Banking, Vol 34, no 2 (May 2002) pp 540-561 , pg 559

Bernanke, Gertler, Watson, Sims, Friedman. “Systematic Monetary Policy and the Effects of Oil Price Shocks” Brookings Papers on Economic Activity. Vol 1997 No. 1 pp 91-157

As well as the aforementioned "Twilight in the Desert", which at times can get very technical and dry, but that is the nature of the subject.

Really it looks to me that this subject kind of took a backseat during the devilishly low oil prices of the 90s and is just now starting back up. What makes it interesting is that no one can agree on anything at all. One set of statistics show this, one set of modeling shows that, etc.
posted by geoff. at 1:41 PM on July 31, 2006

I believe geoff's model has merit, being similar to an observation Jane Jacobs made about road usage: simply put, more roads = more drivers; the 'if you build it they will come' model of usage. Roads aren't so much fulfilling needs (though there is a baseline need to be sure) as enabling desires. If roads are closed in an area and congestion builds to the point where people are no longer willing to tolerate the congestion, they're more selective in their usage of the road, or they seek out alternatives.

The idea is based on the notion that people have a set tolerance for traffic congestion, or, in this case, a set tolerance for the cost of travel. It will be hit whether you drive 200km or 600km in your car.
posted by jimmythefish at 1:58 PM on July 31, 2006

re coal-to-liquids: This can be done very quickly, much more quickly than it would be for everyone to reinvest in an electric car.

Now that I remember that a giant increase in the proportion of electric cars in the fleet would require a corresponding increase of electrical generating capacity, I suspect you're right because of that. Assuming that by "very quickly" you mean replacing a significant fraction of current oil consumption within ten or twenty years. Still, the difficulty of increasing coal production is not to be underestimated. And although we have hundreds of years worth of the stuff at current rates of consumption, it won't last nearly that long if it does take up a big share of the replacement for declining oil. Anyway, they will both no doubt be important components of the response to limited oil supply, along with all the other usual ideas.

geoff: Yes if we had an accurate picture of oil supplies we could create a peak oil graph for the world -- I am not debating that. I am simply stating that we do not know.

Something like two-thirds of what knowledge I have about the technology of oil production came from Simmons' book, actually. I think those technological advances we've had do make things less predictable, as he describes. Combine the resulting decline profiles with the lack of reliable data, and we're in for a surprise some day. As you say, we do see an incredible range of divergent results, using all kinds of methods, given as forecasts of the future with varying degrees of confidence. We don't know much, but I still figure it's worth taking a guess.

We can guess at a range of years for the oil production peak with much greater confidence than we can pick any particular year, and to me it looks like we can say with some meaningful confidence that the odds of it happening in the next decade or two are very good (with a non-negligable chance of RIGHT NOW thrown in as well). That makes it a worthy subject of discussion today, given that all the things that will mitigate the decline of oil take ten years of effort or more to get up to the scale where they'll make a big difference. Not coincidentally, that's also within the expected lifetime of a new car (at least, the ones I would consider buying have a good chance to last that long). So it is near enough, on the basis of weighted probabilities, to have some rational effect on personal micro-economic choices as well. Because there is so much uncertainty, that means there's also a fair chance that the market won't have enough information to get us to anything like an economically-optimal response, so political means to mitigate the potential risk are worth considering. I do think that somehow getting everyone to publish all the relevant numbers, as Simmons called for, would be the best thing that could be done, if it could be done. I wouldn't count on it.

So, I guess we'll just have to take our chances. That's fine with me. With all the problems facing the world, this one is at the moment still mostly an intellectual curiosity to me. I do not think that talking about it, in whatever kind of sensational newspaper coverage, "drives up gas prices" in any significant way. The oil market is big, storage is limited, traders in oil futures do not generally make any big bets based on long-term ideas we know are so uncertain, and I suspect that most of those who do have already busted out. IMO even the lunatic fringe of crazy peakniks do more social good than harm, most of the time. It's better than ignoring the problem entirely.

So, in conclusion: PEAK OIL!!!!!
posted by sfenders at 1:59 PM on July 31, 2006

Why peak oil is probably about now.
posted by jefgodesky at 2:08 PM on July 31, 2006

from Part 3 of the Tribune srticle:

What are the hidden costs of America's imported oil? The answer is complex. It may ultimately be unknowable. But this hasn't daunted the likes of Milton Copulos.

A tenacious economist with the National Defense Council Foundation--a right-of-center Washington think tank--Copulos spent 18 solid months poring over hundreds of thousands of pages of government documents, toiling to fix a price tag on America's addiction to global crude. He parsed oil-related defense spending in the Middle East. He calculated U.S. jobs and investments lost to steep crude prices. He even factored in the lifelong medical bills of some 18,000 U.S. troops wounded in Iraq as of March. (About $1.5 million each.)

Copulos is a highly respected analyst in Washington. And his exhaustive findings flabbergasted the Senate Foreign Relations Committee this spring.

The actual cost of gasoline refined from imported oil, according to Copulos?

Eight dollars a gallon.

When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11. This included a war premium that swelled the Pentagon's spending to protect all Persian Gulf oil to $137 billion a year. In a truly transparent economy, by Copulos' math, filling up Rodriguez's Jeep would run about $230.

When was this figure going to show up in the NYT?
posted by vhsiv at 3:31 PM on July 31, 2006

> Electric is not the future. Nuclear is not the future. Ethanol is not the future. The future is
> less energy consumption, and less complexity.

Nice way of saying "collapse of urban civilization" and "mass die-off." Not that there's anything wrong with these. The standard human reaction to any impending catastrophy is to argue about it until it actually happens (exhibit A: metafilter, whose user base--despite its level of eduction, connectedness, general homogeneity of progressive outlook and forward-thinking mindset--has not come to any consensus about which are the world's most pressing problems, let alone a consensus about how to solve them, and do you expect India, China and Detroit to do better than metafilter? Enough better to matter?) And then in the aftermath whatever survivors there are pick up whatever pieces there are, eat all the more or less edible ones and build lean-to shelters out of the rest, into which they then go to make more babies. Have some of my purple berries, pracowity... Pracowity? ...Prac?... Oh well, the more for me.
posted by jfuller at 4:24 PM on July 31, 2006

PS: When fuel is used efficiently, yet more uses for fuel pop up.
posted by jfuller at 5:05 PM on July 31, 2006

Driving a Prius saves gas. This allows more gas to be on the market to accomplish the same goal. This depresses gas prices and allows more people to drive.

I know about Jevons' Paradox. Nonetheless I'd like to see numbers instead of theory, as it is applied to your assertion that we'd be using less gasoline driving Hummers, since there are a finite number of drivers and cars, all else equal.
posted by Blazecock Pileon at 6:29 PM on July 31, 2006

My plan is to use up as much oil as possible before the Apophis meteor hits and kills us all. Or terrorist engineered bioplague, or technological singularity, or Yellowstone erruption, or the runaway global warming, etc. I'm going to sit there and reminiss about the joy I got out of my 74" television, my really fast sports car, and the secret pleasure of bounding through snow drifts in my Hummer. It will give me some nice memories as I starve or die of exposure in my urban loft aparment, surrounded by Ikea furniture and a wall of glass windows.
posted by humanfont at 7:37 PM on July 31, 2006

humanfont: well, at least you're planning ahead.
posted by saulgoodman at 10:38 PM on July 31, 2006

the oil economy is here to stay until the oil runs out

not before an environmental collapse. The data is pretty straight-forward - calculate the amount of proven reserves, calculate the amount of CO2 is represents, add it to the atmosphere and that equals your temp increase. I don't have the numbers handy but I've read that it would basically fry the earth. We will have an economic collapse long before we ever use up the oil reserves.
posted by stbalbach at 6:41 AM on August 1, 2006

See, as fuel efficiency increased so did consumption. Yes the number of drivers and cars are finite but the paradox applies to all consumption of the said energy. Conservation leads to lower prices which allow gas powered operations to occur where they were previously unfeasible.
posted by geoff. at 8:04 AM on August 1, 2006